Tax agent Jenny Theodore said the ATO was "actively chasing" over tax returns and urged Aussies to get on top of their tax obligations. ·Source: Supplied/Getty
Eire Consulting founder Jenny Theodore told Yahoo Finance she’d heard from numerous Aussies who had received calls or voicemails from the ATO about an overdue tax return. The deadline for last year’s tax return was October 31, with Aussies risking penalties of up to $1,650 for being late.
“If the ATO is unable to get through, what they’re doing is leaving a voicemail and asking people to respond within two business days and to call them back and give them an update as to where the return is at and why it is overdue,” Theodore said.
Theodore said she’d noticed the ATO was specifically calling up people who had an ABN, so people who were doing contracting work, running a business or a side hustle.
“From the perspective of the tax office, with a Tax File Number tax is being withheld from your salary when you are paid, whereas with ABN you are generally not paying tax as you are earning income, it is all sort of paid at the end of the year,” she said.
“So it’s likely that they’re targeting people with ABNs on the basis that they probably will have a tax debt to settle.”
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An ATO spokesperson told Yahoo Finance it made a "concerted effort to engage with taxpayers who have overdue tax lodgments".
"Engagement interactions range from SMS, emails, letters, and phone calls to stronger and firmer actions," the spokesperson said.
"We recognise that sometimes people don’t meet their lodgment obligations on time, even with the best intentions."
What to do if you get a call from the ATO
While it might seem scary to get a call from the ATO, Theodore said the best thing to do was to work with them and try to get on top of your tax obligations.
“The best way to approach it is to let them know your reasons for delayed lodge, whether you just financially haven’t been in a position or whatever it is,” she told Yahoo Finance.
“Then give them reassurance that you’re actioning this, whether it’s lodging your tax return yourself or you’re going through an agent.
“They just want an update from you on what action you’re taking to get this overdue return lodged.”
The ATO recommended people engage with them as early as possible to reduce the risk of a penalty being applied.
Ignoring the ATO can be expensive
The ATO can apply penalties if you keep putting off your tax return.
“There’s a failure to lodge penalty that can be added on,” Theodore said. “As well as that, if you do have a tax debt, you’ll actually incur interest. So there’s a general interest charge that will be added on to any overdue, unpaid debt.
“So by putting it on the long finger and putting it off, you’re potentially increasing the amount that you’re going to owe.”
The failure to lodge penalty is currently $330 for each period of 28 days that the return or statement is overdue, up to a maximum of five times or $1,650. The general interest charge is 11.42 per cent annually.
If you’re hesitant to lodge because you think you’ll owe a tax debt, Theodore said you can negotiate a payment plan with the ATO to pay off any debt in instalments. But bear in mind this will also attract interest.
“You will pay a bit more but you’re going to pay penalties and general interest charges by not lodging,” Theodore explained.
“So it’s better to be paying off your debt and incurring interest but getting it paid off and getting your tax obligations up to date.”
The ATO said most taxpayers could prepare and lodge their tax returns online, with most processed in two weeks.
How can I tell if I'm getting a legitimate call from the ATO?
Phone calls from the ATO do not show a number and will appear as 'No Caller ID' on your phone.
“The ATO will always call from a private number, so if you're getting an overseas number or something from a different country, that’s going to be your first sign of it being a scam,” Theodore warned.
“The other thing I would say for people is just to err on the side of caution with regards to giving out any personal details.
“The ATO will never ask for your Tax File Number, your date of birth or any personal details, they’ll never be asked by them to give those details over the phone. So that would be a sign of a scam as well.”
Red flags to watch out for
The ATO said to watch out for these common red flags:
The ATO will never send you an unsolicited email or SMS containing a QR code or hyperlink to log into online services.
The ATO will never ask for passwords, account numbers, or other sensitive data via email, SMS or unsolicited phone calls.
Calls from the ATO do not show a number. They will show as No Caller ID.
The ATO will never threaten you with immediate arrest or demand you stay on the line until a payment is made.
"If you're unsure if the call is from the ATO, or if you've received a scam call and shared personal information or made a payment, call us immediately at 1800 008 540 to verify or report it," the ATO spokesperson said.
